IOB reports double-digit rise in net profit in March quarter & FY23

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Indian Overseas Bank (IOB) reported double-digit growth in net profit for the March quarter and also for fiscal ’23, supported by strong growth in net interest income and improved asset quality.

The Board of Directors has approved the Chennai-based bank’s plan to raise capital by up to Rs.2,000 crore.

For the quarter ended 31st March 2023, IOB’s net profit increased by 18 per cent at ₹650 crore as compared to ₹552 crore in the year-ago quarter.

The bank’s operating profit was higher at ₹1,882 crore (₹1,614 crore) backed by higher income.

The total income was ₹6,622 crore (₹5,719 crore). Interest income grew by 18 per cent to ₹5,192 crores (₹4,215 crores). The net interest margin was 3.20 percent (2.41 percent).

For the March 2023 quarter, total NPA decreased to 7.44 per cent (Rs. 14,072 crores) from 9.82 per cent (Rs. 15,299 crores) in the year-ago quarter and 8.19 per cent (Rs. 14,333 crores) in the previous quarter.

Net NPA fell below 2 per cent and stood at 1.83 per cent (Rs. 3,266 crores) as compared to 2.65 per cent (Rs. 3,825 crores) in Q4FY22 and 2.43 per cent in the previous quarter.

For the full year ended 31st March 2023, the Bank’s net profit grew by 23 per cent at Rs. 2,099 crores compared to Rs. 1,710 crores in FY22. Operating profit was Rs. 5,942 crores as against Rs. 5,763 crores.

Interest income was higher at Rs.19,400 crore (FY22) at Rs.16,730 crore. Other income was lower at ₹4,109 crore (₹4,903 crore).

Net interest income grew by 31 per cent to INR 8,256 crore in FY23 (Rs. 6,311 crore in FY22), on the back of strong credit growth, according to a statement.

Total advances grew by 21 per cent to Rs.1,89,009 crore as of March 31, 2023, from Rs.1,55,801 crore a year earlier. Total deposits increased to ₹2,60,883 crore (₹2,62,159 crore). The bank’s CASA ratio improved to 43.74 percent as of March 31, 2023, compared to 43.44 percent a year earlier.

Total provisioning and contingency decreased at ₹3,594 crore in FY23 as against Rs.3,984 crore in FY21. Provision for NPA was also lower at ₹2,858 crore (3,401 crore).

The benefit coverage ratio (PCR) improved to 92.63 percent from 91.66 percent on March 31, 2022.

The bank plans to raise its paid-up share capital by Rs. 1,000 crore via various options available. The bank also plans to issue Basel III Level two bonds to a maximum of Rs. 1,000 crore.

IOB plans to open 40 new branches across India under the branch densification plan for 2023-24.